The prime minister says interim deal with Iran only set Tehran's nuclear program back some six weeks.

The overarching formula that will ensure an Israeli-Palestinian agreement is a demilitarized state that recognizes the Jewish State of Israel, Prime Minister Binyamin Netanyahu said Tuesday.

Netanyahu, speaking in Tel Aviv at the Institute for National Security Studies’ annual international conference, said that formula epitomizes Israel’s two main demands: that its security is maintained following an agreement and that the agreement ends the conflict, and all claims on Israel.

“We don’t want to annex the Palestinians as Israeli citizens and we don’t want to rule over them,” he said, “but the Palestinian state must be demilitarized, which means that certain signs of sovereignty need to be limited. The minute you demilitarize a state, you limit certain capabilities. That is necessary; that is the real Middle East.”

Netanyahu, who did not break any new ground in this speech, repeated what he said last week in Davos: that in the Middle East to make peace you need three – not only two – to tango.

“We are interested in continuing the negotiations and try to get to this agreement, I know that the Americans are interested that we get there, I cannot tell you at this time whether the Palestinian leadership is ready to deal with the concessions it will have to make,” he said.

Netanyahu stressed that while everyone always talks about the concessions Israel needs to make, it is worthwhile paying attention to the concessions that Palestinians will have to make to get to an agreement that will last and provide a chance for coexistence in peace and security. Among those concessions will be forfeiting their claim of a “right of return” for descendants of refugees.

Netanyahu said that his aim in the negotiations with the Palestinians is to prevent a bi-national state, and on the other hand to ensure that another Iranian-backed state is not created that will fire missiles and rockets into Israel.

“We have to achieve both those goals,” he said. “After five years of cautious, responsible navigation we will in the near future know if we can continue the negotiations with the Palestinians.”

Downplaying the significance of the paper US Secretary of State John Kerry is expected to present to both sides in the near future, Netanyahu said this will be a paper that reflects “American positions, they are not Israeli positions, but American ones.”

He said Israel was not obligated to “agree with everything that the Americans present.”

Regarding Iran, Netanyahu reiterated his well-known position that the interim agreement reached by the world powers and Iran in November was a “bad agreement” that only set the Iranians back some six weeks from where they were before the accord.

He said that the test will now be in whether and what kind of final agreement will emerge from continued negotiations.

“We will only support an agreement that will ensure the complete dismantling of Iran’s infrastructure and capabilities to achieve nuclear weapons,” he said.

“One thing I can promise,” he added, “is that we will not let Iran get the capability to manufacture nuclear weapons. That was and remains Israel’s policy.”